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Dec 21

Day Trading Online Tricks

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Buying and selling shares with the sole objective to make profits from the buying price and the selling price is known as day trading. The important difference between day trading and other forms of trading is that in day trading, the positions are not held overnight, when the market is closed for the day.

With the advent of the internet, the brokers and the investors have direct access to the exchanges and as such they can make day trading at a very low cost.

The conditions in the exchanges are common for all the traders. Understand the basics and put the tricks to practical application to reap the maximum advantage. Online day traders have the special advantage to make transactions with great speed. The more knowledgeable in this operation have the edge on those who know less about the procedures of the trade. The experience of the trader and one’s capacity and willingness to take risks are important.

In day trading there are many styles ranging from short-term scalp when positions are held for a few seconds to longer swing and position trading. In the later case, the position may be held throughout the day depending upon how the trade is doing. Online operations felicitate and provide you with more opportunities to enter into quick deals when you observe that the market is moving on the lines expected by you.

Online day trade enables an investor to trade in financial markets all over the world, with great speed and agility. Speed and timing are the important factors in online trades, which make or break the trade.

Online operations are very useful in keeping track of the trend trades, which is the trade in the direction of the current price movements and counter trend trades which are against the direction of the current price movement; also for ranging trades that move back and forth between two prices.

One of the important online tricks for day trading is to identify the market that moves at a medium pace. This is ideally suited for a beginner in this area. You can have access to the exchanges of your choice through direct access brokers like interactive brokers and transact futures. While selecting the market for your proposed operations, look into the factors like the initial financial status of the trader, the trading system and the geographical location of the trader.

Take care about the factor of trading margin availability. This is the amount to be deposited while opening a day trading. Traders have different types of temperament and approach of each one varies. Some take their own time to trade, whereas the others are happy to make their trade quickly.

Whether you trade regularly or not, the market that you choose should have the facility to trade 24/7 hours. The favorable or adverse conditions will engulf a particular market at the most unexpected time and you should be in a position to take the corrective measures through online, without loss of time.

Most of the basic rules and regulations and the precautions to be taken for the normal share trade are part of the day trading online tricks. In addition, you need to look into the aspect of low initial and maintenance margin, low tick value, smooth and consistent moves, and accessibility to trades in different locations.

May people think that online day trading is risky. Actually it is not so. This is the fear of the ignorant. Investors having good knowledge and those who work on the basis of recent update and invest at the right time, have a different story to tell. If you have the capacity to master the market scenario, you do not need any additional trading tricks to achieve success.

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Nov 16

Essentials of Successful Day Trading

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Day trading refers to trading, i.e., buying and selling the stocks within the same trading day in such a way that all trading positions are generally completed before the close of the market on the trading day. Day trading is opposite to after-hours trading which allows the investors to buy and sell shares and keep them for longer periods.

Earlier, the day trading was done exclusively by the large financial companies, banks and professional investors. Of late, it has gained acceptance from the casual investors due to the advancement of trading technologies, changes in legislation and the advent of the computers and the internet.

Day trading is a full time business with possibilities of profits and losses. As a day trader, you need to nurture a right attitude towards profits and losses. An occasional loss should not prove depressive enough to make you lose your heart altogether and deter you from continuing with your trades.

According to Bruce Kovner, if you personalize losses, you cannot trade. As a good trader you should not have any ego. You must learn to swallow your pride and get out of the losses. You must gain the strength to take your losses without wavering in your determination to win. This can be done when you eliminate fear, doubt and hesitation from your mind as these negative thoughts may prevent you from taking a balanced approach. Eliminate the emotions that can vitiate the chances of your success.

On the other hand, a good profit from trading should not cause so much euphoria that you lose sight of your focus and take unnecessary investment risks that defy common sense. At the same time you must always be ready to learn from your mistakes and be open to constructive suggestions.

It is also recommended in this context that you should maintain a journal of your important day trading events detailing reasons about profits and losses. You should try to analyze which strategy won you profits and what mistakes led to losses. Mistakes are more likely to occur while making the technical analysis of the charts and graphs. Your own journal can become a handy reference material to guide you through your future day trading problems. It will also help you to avoid mistakes and develop your winning strategies.

It is very important to learn the art of risk management in day trading. Risk management can make a lot of difference between success and failure. You must control your emotions and urges and ensure that you are around to trade tomorrow.

Great day traders are great profit and risk managers. It is always advisable to take small and affordable risks. It is generally recommended that you should risk ¼% to 1% per position. In any case the risk should not exceed 2% of your investment. The idea is that you should be able to trade the next day as well, which would not be possible, if you blow out most part of your capital today. If you do not have any money to trade the next day, how are you going to earn your living or make profits? So your each position should be so small that you can give a damn to your losses. Suppose you are investing a total of $20,000, a loss of, say, ¼% will not amount to too much.

You should develop a winning mindset based on the mental/emotional rules of a winning trader. Develop a detached attitude towards trading and reduce the stress that is usually associated with gains and losses in stock trading. This will enable you to travel your path with confidence.

Stock trading remains unpredictable despite the advancement in research and analysis techniques. It is somewhat like a game of roulette. Each flip is independent of the other. If you bet on black and win, it does not follow that black would win you again. Your next trade has nothing to do with your previous one. Each stock has its own features and has to be analyzed in its own perspective within its own parameters.

The stock trading market is an ever-changing entity. It presents unique challenges in different scenarios. If you want to succeed in day trading you have to develop an intuition in dealing with the unprecedented financial situations every day. You, therefore, must develop an ability to adjust to the changing market circumstances.

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Oct 29

Swing Trading Vs Day Trading

By adminNo Comments

Be honest, now. Back in ’99 when seemingly every waiter and grocery-store clerk had a stock portfolio, did you get rich day trading? Back in those good old days there was plenty of talk about making money day trading, but how many people do you know who actually accomplished it? One look at a 10 year Nasdaq chart leaves no doubt that some people did get rich on the way up–and a few of them probably had the good sense to get out before it was too late. But most people ‘played’ the market–and lost–through mindless buying of mutual funds, and by accepting worthless corporate stock options in lieu of actual pay.

Fast forward to 2007. The Dow is at its historic high and the Nasdaq is roaring back to life. It doesn’t take a genius to realize that now is the time to think about trading again. But truth be told, most people will not take the initiative to make their own trading decisions. Most people will get burned all over again.

To really profit from the coming bull market you must commit yourself to making your own trading decisions. Don’t trust your broker, your boss, or your brother-in-law. Only by assuming responsibility for your financial future can you expect to achieve success; nobody is in a hurry to do it for you.

Most people who do decide to trade on their own hook will naturally think of day trading. And you can bet when the bull market takes off plenty of pundits and gurus will be urging you to day trade. But for most people day trading isn’t a viable option, either because they can’t afford to sit in front of a computer screen all day, or because they have enough common sense to realize day trading is a lethal game. So how can you profitably trade?

The answer for many people is swing trading. Swing trading is the practice of holding stock positions (long or short) for a few days to a few weeks. You don’t need to sit in front of your computer all day with your finger on the panic button, and you don’t have to play cat and mouse with market makers looking to hang your scalp on their wall. The typical moves made by a stock during a swing play will dwarf the tweenies that day traders salivate over, and with sensible use of stop orders you won’t need to lose sleep at night fretting about the risk.

Day trading is a little like the World Series of Poker. Do you think you could sit down with Greg Raymer or Chris Moneymaker and beat them at a hand of No Limit Texas Hold ‘em? When you day trade you’re taking the same chance. The people on the other side of your trades are professional market makers. What the stock will do in the next day, week or year may be beyond the control of any one person, but what happens in the next 15 seconds depends entirely on the decisions of individual traders. Your loss is their immediate gain, and these guys (and gals) have been doing this for a long time. Even the most perfectly formed setup quickly turns into a sucker-play because these professionals know the newbies will take the bait. In the world of day trading, the losers get their hat handed to them in short order.

With swing trading you get the same fair chance as everyone else, institutional traders and individuals alike. As long as you trade stocks with a reasonable amount of volume, you can rest assured that no one trader, or even a group working in unison (which would be illegal, to boot) has the resources to bully the market. Setting your stop 5% below your entry point virtually guarantees that you won’t get scalped (it doesn’t guarantee the stock won’t move 5% against you, but if it does it won’t be because one trader decided to scalp you). And the profit potential for a well played swing trade could be 10% in a few days, or maybe 20-30% in a few weeks. Of course, it takes knowledge and experience to identify the right trades, but your chances of success are just as good as any Wall Street trader if you’re willing to take the time to ‘plan your trade and trade your plan.’

Truly outstanding bull markets only come along a few times in a lifetime. Swing trading gives you a realistic chance of profiting from those great bull markets. You already missed the last one in ’99. Don’t miss out on this chance. Now is the time to start studying up on swing trading so you’ll be ready.

Todd Strickland

[http://swing-trade-online.biyazo.com]

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